Who remembers the big ticket ad types of last year launching to great fanfare with stories of super eCPMs?  No doubt all your friends and every developer forum told you to move on up to these ad types. After all, why would you run banners at $0.10 eCPM when you could be making hundreds of dollars with each thousand impressions instead?

But 6-12 months on, are you still achieving those dizzy heights? Was it all just hype? Is there a way to understand the trends and therefore maximize your returns?

Over 15 years ago, Gartner began using a Hype Cycle to analyze the introduction of new technology. The hype cycle was designed to not only show the inevitable hype (and fall) surrounding new concepts, but the subsequent stages, long term benefit and wide spread acceptance. The key to understanding this can ensure you benefit from this cycle.

The cycle can be displayed using a simple info-graphic.

So referring back to the topic of new and advanced ad formats, there’s no doubt the promoted $100 eCPM lies at the top of the hype cycle and even though many developers reached those heights initially, they found their ad revenue results dipping into the ‘valley of despair’, before flattening out into a ‘production reality’.

At LeadBolt, this production reality for high performance ad types is averaging $5 to $15 eCPM. Obviously, the more targeted and qualified a publisher’s traffic then higher values can be achieved but that is a good basis for our discussion.

So what does this hype cycle tell us about ad type performance, beyond some sales cynicism?

1. A new ad type is launched. It’s new, fresh and attention-grabbing. Users respond positively, driving up ad revenues.
2. Due to its success, the ad type appears more often, making it more commonplace. Users respond less and ad revenue falls.
3. The ad type is optimized, reaches a level of status and delivers a stable revenue return.
4. Finally, adoption becomes so widespread the ad type becomes an increasingly invisible commodity and revenue eventually declines to almost nothing e.g. banner ads

Understanding the connection between the hype dynamics and users’ acceptance across multiple ad types can be the real key to consistently high revenue returns for app developers and publishers.

So, what are the practical learnings?

• One, new ad types do deliver well in their first releases and early adopters can gain a lot. These developers exploit our natural curiosity to new things, so seeking out and testing new ad types is surely a way to revenue performance.
• Two, beware of fighting against the curve. As the new technology moves beyond stage two, ad networks will continuously optimize the ad type to reignite the hype revenue and move it into stage three. However, it is at this stage that less than desirable practices are also likely to emerge as ad type implementers attempts to prolong the hype instead of moving the technology into productivity stage.

By recognizing the connection of the hype cycle with user acceptance, savvy developers will ride the wave, ensuring they maximise their revenue at each stage, while implementing an effective strategy that combines different ad types at different phases in the hype cycle. This way, you can benefit from the hype, not be too affected by the inevitable crash, and continue to maximizing your returns through the (hopefully) long productivity stage.

To understand more about the current trends in Advertising and how to combine them with your long term strategy, visit LeadBolt at booth #158 at this year’s Apps World.